The legal side of a home-based business

Picture the scene.

You've been made redundant from your job as a result of the credit crunch and have decided to turn your hobby - be that jewellery making, teaching French, or basket weaving - into a home-based business.

Great decision, because it means you're making money doing something you love. (I'm so much happier since I set up my home-based business. My husband's noticed that too.)

But when you're in business, you've got to think about so much more than if you were doing what you do, as a job.

If you were weaving baskets for an employer, all you have to do is - weave baskets. You don't have to find customers, pay bills, keep your books.

And you don't have to worry about whether your contracts with your customers and suppliers would stand up in a court of law.

If you're running a business weaving baskets, you have to do all of that.

So often, micro businesses don't put written contracts in place. Remember - a verbal contract's not worth the paper it's written on.

And then if your customer doesn't keep to your payment terms, could you sue them?

I would suggest thinking about that and talking to a lawyer.

But do remember that not all lawyers, like accountants, specialise in micro businesses. Many of them would charge you a huge amount and that's just what you don't need.

Try a service like Lime One (hat tip to Enterprise Nation for pointing me at them) that will give you "a template and minimal support" if that's what you want.

Thanks to Stefan for the tip to write this.